German ICT sector to generate EUR 172 bln revenue and 39,000 new jobs in 2020

Optimism: Business climate has climbed to its highest level since May 2019 * The digital industry is still booming and will continue to increase sales in 2020

German ICT sector is expected to grow by 1.5 percent this year in terms of revenues to EUR 172.2 billion, according to a study by digital association Bitkom.

 

The German market for IT, telecommunications and consumer electronics is expected to grow by 1.5 percent this year to 172.2 billion euros. By the end of the year, companies in Germany are expected to create 39,000 additional jobs. For the first time, this would employ more than 1.2 million people in the industry. After the subdued expectations in the second half of 2019, the business climate has recently brightened again. The Bitkom-ifo digital index climbed to 26.9 points in December, the highest level since May 2019. The digital association Bitkom announced this at the beginning of the year in Berlin.

Current debates about artificial intelligence, 5G networks and digital sovereignty show what enormous importance the digital economy has in Germany, ”says Bitkom President Achim Berg. “The stable growth of the Bitkom industry is an expression of the increasing digitalization of the economy, the state and society. This also and especially applies to the economically very difficult year 2019, which was characterized by trade conflicts, the economic downturn and the Brexit dispute. ”Last year the ICT market exceeded expectations. Sales rose by 2.0 percent in 2019 to 169.6 billion euros. At the beginning of the year, Bitkom had expected growth of 1.5 percent. which was characterized by trade conflicts, the economic downturn and the Brexit dispute. ”Last year the ICT market exceeded expectations. Sales rose by 2.0 percent in 2019 to 169.6 billion euros. At the beginning of the year, Bitkom had expected growth of 1.5 percent. which was characterized by trade conflicts, the economic downturn and the Brexit dispute.”

Last year the German ICT sector exceeded expectations. Sales rose by 2.0 percent in 2019 to 169.6 billion euros. At the beginning of the year, Bitkom had expected growth of 1.5 percent.

Digitization of the economy is driving demand for information technology

The information technology wins as the largest segment of the industry in importance. According to Bitkom calculations, sales in this area will increase by 2.7 percent to EUR 95.4 billion in 2020. The software sector is growing the most, with an increase of 6.4 percent to 27.6 billion euros. The market for IT services, including project business and IT consulting, is also growing at an above-average rate of 2.4 percent to EUR 41.9 billion. “Companies are changing their organizational structure and developing digital strategies, which stimulates the demand for IT consulting and software applications.” By contrast, business with IT hardware is expected to decline slightly. Sales are expected to decrease by 0.4 percent to EUR 25.9 billion.

 

Telecommunications services are under pressure

The telecommunications expected to continue growth over the past two years. In 2020 the market is expected to grow by 0.9 percent to 68.8 billion euros. According to Bitkom calculations, telecommunications services will generate 48.8 billion euros, which corresponds to a moderate plus of 0.4 percent. The business with end devices grows to 12.8 billion euros (+2.5 percent). Investments in infrastructure increase by 2.0 percent to 7.2 billion euros. “The network operators spent billions last year to auction the 5G frequencies,” says Berg. “The revenue growth of the network operators is around the zero line, at the same time they are required to invest billions in the networks.

 

Consumer electronics are in the red for the third year

Consumer electronics continues to slide. According to the Bitkom forecast, sales will drop sharply in 2020 for the third time in a row. The smallest ITC submarket is expected to shrink this year by 7.0 percent to EUR 8.0 billion. Berg: “The consumer electronics market is currently largely saturated. Although prices are almost stable, consumers currently prefer to invest in smartphones or new services rather than consumer electronics devices. ”

 

Job engine digitization in German ICT sector

In 2019, 42,000 additional jobs were created in the Bitkom industry. “Digitization creates tens of thousands of new jobs every year and is the strongest driver of employment in Germany. Bitkom has created a good 200,000 additional jobs since 2016, ”says Berg. “The positive job balance is clouded solely by the lack of IT specialists, which is becoming increasingly acute.” According to a recent Bitkom study, 124,000 jobs for IT experts were vacant at the end of last year. This is an increase of 51 percent compared to 2018 with 82,000 vacancies. “The problem of skilled workers is the brake on the digital industry and thus also on the entire German economy. Every vacant position means less growth, added value and innovation – which sets us back in global competition, ”says Berg.

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